“By codifying a set of underwriting expectations, the guideline could also be construed as a step towards standardizing mortgage contracts,” the Credit Union Central of Canada said in its assessment of OSFI’s B-20 guidelines. It’s “something that could harm the system’s ability to provide mortgages to the ‘non-conforming’ borrowers … i.e., low-income individuals, immigrants, rural Canadians (where incomes tend to be more volatile), Aboriginal people, or simply members the credit union knows well but for whom income documentation is hard to come by, including ‘asset-rich, income poor’ individuals.”

Earlier this year, OSFI said it would compel federally regulated lenders to implement a series of lending changes by their fiscal year-end (October 31 for most banks). Among those changes were the reduction of HELOC loan-to-value from 80 per cent to 65 per cent and the elimination of 100 per cent financing.

In recent months, brokers and borrowers have flocked to credit unions viewing them as a sort of a safe haven from the storm of B-20.

OSFI cannot impose the guidelines on provincially regulated credit unions, the CUCC said, but the guidelines can apply to lenders owned by federally regulated companies.